Tesi finances the circular economy through companies and funds

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Tesi’s Circular Economy programme provides financing of MEUR 75 for promising Finnish circular economy companies.

Tesi plans to make some ten investments under its Circular Economy programme, following its normal investment principles: each project will have private co-investors. As an active owner, Tesi contributes experience and networks to companies, in addition to money and risk-taking capability.

“The size of the programme is MEUR 50, and together with private co-investors substantially more growth financing can be channelled to companies via the programme. The impact of the programme will probably be altogether four times what Tesi invests,” estimates Jussi Hattula, who heads Tesi’s Growth & Industrial Investments team.

Tesi wants to contribute strongly to promoting the circular economy. The team responsible for investments, comprising Matti Kangas, Mikael Niemi and Juuso Puolanne, will assess the potential of projects and assist companies selected for the programme to grow and internationalise.

Through the programme, Tesi also hopes to demonstrate to the private investment market that the circular economy is a very sustainable direction in which to focus investment.

“Our objective is that one or two funds in Finland would focus at least partly on the circular economy,” adds Kangas.

Towards new business models

“We support entrepreneurs in developing their business models towards enhancing the efficient use of energy and resources. We are also interested in companies that haven’t yet focused on the circular economy but would be prepared to remodel their business operations to be more in line with the circular economy, perhaps with a larger investment,” says Hattula.

Potential investee companies for the programme range from small startups right through to large industrial players. Kangas highlights the wide scope of the programme.

“Many types of company fit under the circular economy umbrella – for instance, a company that sells its products as a service instead of as goods. This supports making products durable, as well as servicing and repairing them, thereby saving raw materials,” he explains.

“A sharing economy enables the more efficient use of energy and resources. Instead of everyone owning their own machine or device, a digital platform makes it possible to borrow one just for the time it’s used. We hope companies will grasp the idea of a sharing economy because it will develop into good business,” adds Niemi.

In a hurry for the circular economy

“We believe that Finnish companies have good opportunities to become forceful players in the circular economy on an international scale also, because we’ve started out earlier than others. Being competitive is still relatively easy as long as the company makes a brisk start,” says Niemi.

“The ‘manufacture, use & dispose’ type of thinking utilises resources very inefficiently,” says Niemi. There’s a hurry on now for the circular economy – we’ll deplete the planet’s resources if we don’t act now. If at the same time we can create profitable international business, so much the better. Success must this time come from elsewhere than the uncritical use of natural resources, though,” adds Hattula.

Tesi will gladly brainstorm with companies how the circular economy could be incorporated into their own businesses.

“The most important thing is that companies identify themselves as being in a group that can develop the circular economy, and then boldly get in touch with us,” concludes Kangas.

Tesi’s Circular Economy programme

What it is: A Tesi programme for providing financing of altogether MEUR 75 to companies in the circular economy sector.  MEUR 50 is intended for direct investments, and MEUR 25 for creating VC funds investing in Finland’s circular economy.

Why:  Tesi will promote the achievement of Finland’s climate targets through the programme. The circular economy is one of Tesi’s strategic objectives.

Who it is for:  For companies aiming to develop the circular economy. The circular economy is a broad concept encompassing renewable materials, lengthening product lifecycles, products as a service, resource efficiency & recycling, and a sharing economy.

Investment contacts:

Mikael Niemi, mikael.niemi@tesi.fi, +358 50 597 7303
Juuso Puolanne, juuso.puolanne@tesi.fi, +358 50 570 0235